Media & Entertainment Industry In India to exceed US$ 39B by 2023

Indian media and entertainment industry grew at a CAGR of 10.90 per cent during FY17-18 and is forecasted to expand at a CAGR of 13.10 per cent during 2018-23.

Definition / Scope
Market Overview
Top Market Opportunities
Market Drivers
Industry Challenges
Technology Trends
Regulatory Trends
Other Key Market Trends
Market Size and Forecast
Market Outlook
Technology Roadmap
Distribution Chain Analysis
Key Market Players
Strategic Conclusion
References
Appendix

Definition / Scope

Entertainment industry refers to the mass media companies that control the manufacture and distribution of mass media entertainment. It includes segments like film, music, theater, television, radio, etc. Media refers to the means of communication such as publishing, internet and broadcasting.

The term media and entertainment are linked inextricably to each other in the sense that entertainment is provided via various media.

Market Overview

Media & Entertainment Industry in India, has grown at the rate of 13% in the last year and accounted for USD 23.04 billion in 2017 and tends to reach USD 30.72 billion by 2020. The Media and Entertainment (M&E) industry is one of the fastest growing industries in India.

It consists of various segments like radio, films, animation and VFX, television, print, gaming, OOH, etc. The improved economic conditions, rising investment through private equity and FDI, higher consumer spending and policy support have given an impetus to the E&M industry.

With the industry poised to have double digit growth in the coming years, 7 to 8 lakhs jobs are expected to be created.

Top Market Opportunities

The Indian advertising industry is anticipated to be the second fastest growing advertising market in Asia after China. Currently, advertising revenue contributes 0.38 per cent to India’s GDP. India’s advertising revenue is worth US$ 9.44 billion in FY 18.
India is one of the top five markets for the media, content and technology agency Wavemaker where it services clients like Hero Moto Corp, IPL, Myntra and Paytm among others.
India’s media consumption growth is 9 times that of US and 2 times that of China. The media consumption in India has been growing at a CAGR of 9 per cent over the past six years.
As of 2017, this industry provides employment to 5 million people, comprising both direct and indirect employment.
As of 2017, 197 million homes out of the total 298 million have TV sets. This presents opportunity for Indian television market to cater to 100 million homes.
The Indian M&E industry is expected to grow at a CAGR of 13.10 per cent during 2018-23. This is one of the highest rates globally.

Market Drivers

Higher Investments

Between Jan-Jun 2018, the sector recorded investment with five private equity investment deals worth US$ 115 million. As per the data released by Department of Industrial Policy and Promotion, the FDI inflows in the Information and Broadcasting sector during April 2000-June 2018 stood at US$ 7.17 billion.

As of September 2018, Twitter declared video content collaboration with 12 Indian partners for video highlights and live streaming of sports, news and entertainment.

High demand

The rapidly mounting young population coupled with increased use of 3G, 4G and portable devices is driving the demand. The evolving life styles and rising income of Indian population has also augmented demand for aspirational products.

The per capital income grew at the rate of 8.6 per cent and reached US$ 1,750.74 in FY 18. Also, during 2017-2025, elite, affluent, aspirers, and next billion income classes are expected to grow at a CAGR of 11 per cent, 9 per cent, 5 per cent and 2 per cent respectively.

Revenue

Before only advertising was key source of revenue for M&E industry but recently revenue from subscription and value added services has also contributed enormously. The entertainment industry is also likely to benefit from continued rise in the propensity to spend among individuals.

Industry Challenges

Technology and Digitization

The digitization of the infrastructure and migration to HDTV are major challenges for this industry. Broadcasters have to be keen on phasing out analog system in broadcasting and defining how they traverse on the digitization path. Also, as technology never remains static and gets better every day, this brings threat to the TV industry with the introduction of smartphones, laptops, Netflix, YouTube, etc.

Rising Consumer Expectations

Consumers want different experiences on each platform, different flavours of content and most importantly they want it all on their personal schedules. The expectation of consumer is increasing and they are no longer satisfied with the traditional offerings. Consumers today are tech savvy and they want everything at their fingertips.

Talent and New Skill Requirements

The rapid evolution of technology in M&E industry will transform a large number of current job roles. The existing jobs will require new skills as the rise of many new roles due to technological advancements will increase. Re-skilling of the current workforce would be required. As data science and analytics are gaining more acceptances in the media space, this industry will see the requirement of data roles in a big way.

Piracy

Piracy has been a serious challenge to the Indian M&E industry. Annually, film sub-sector alone loses US$ 2.8 billion of its total revenue to piracy. Additionally, the rise in digital downloads by consumers and easy availability of inexpensive rental option has threatened movie theatre business model.

Technology Trends

The adaptation of online video viewing is increasing in India in account of growing mobile and smartphone penetration. The number of smartphone users in India is expected to expand by 15.6 per cent to reach 337 million in 2018, which is the highest forecasted growth rate in the world.
Online video streaming market is led by geographical coverage of high speed data, increasing smartphone, affordable data charges and availability of creative video content. By 2023, the number of online video streaming is expected to touch 550 million from forecasted 225 million in 2018.

Regulatory Trends

In 2011, the Government passed the “The Cable Television Networks Amendment Act, 2011 for digitisation of cable television networks.
The government has taken initiatives such as increasing FDI limit from 74 per cent to 100 per cent in cable and DTH satellite platforms and digitising the cable distribution sector to attract greater institutional funding.
The Government has decided to set up the National Centre Excellence for Animation, Gaming, Visual Effects and Comics Industry in Mumbai.
In order to boost reforms in the broadcasting sector, the Telecom Regulatory Authority of India is set to approach the Ministry of Information and Broadcasting.

Market Size and Forecast

India M&E industry grew at a CAGR of 10.9 per cent from FY 17-18. This industry is worth US$ 22.28 billion in FY 2018.
Newspaper audience has increased by 40 per cent to 407 million in 2017 from 295 million in 2014.
Television viewership grew at the rate of 12 per cent y-o-y in 2017. Television market generated a revenue of US$ 10.11 billion in FY 18
A total of 243 FM channels are currently operating in India.
Animation and VFX industry has increased from US$ 928.6 million in FY 17 to US$ 1.15 billion in FY18.

Market Outlook

Indian M&E is expected to grow at a CAGR of 13.10 per cent to reach US$ 39.68 billion by FY 23.
India’s advertising revenue is expected to reach US$ 18.39 billion in FY 23.
The Indian digital advertising industry is expected to expand at a CAGR of 32 per cent to touch US$ 2.93 billion by 2020
The animation and VFX industry is expected to grow at a CAGR of 15.50 per cent during 2018-2023.
The film industry is forecasted to grow at a rate of 11.9 per cent by 2020 supported by digitisation. Also, cinema exhibition industry is expected to have over 3,000 multiplex screens by 2019.

Technology Roadmap

In the coming years, the focus for the companies will be on investing in the latest technologies like digital transformation, data analytics, using artificial intelligence to enrich content metadata, getting contents to the screen faster and giving viewers a great end user experience.

Machine Learning based analytics is enlisted on the top of the company’s technology roadmap as it will play a critical role in providing great end user experience. AI/ML can be used in the entertainment industry in order to analyze which movie to buy and at what price.

Technology can also be used to analyze the socio environmental factors, audience likes and dislikes, etc. to help identify what kind of content to commission.

Distribution Chain Analysis

The modern channel through which the consumers look for entertainment is the smartphones. People use smartphones to read news, watch movies, play games, listen songs, etc. Internet is also rapidly emerging as a widely used distribution channel.

Key Market Players

Below are some of the key players in different segments like television, print, films and music.

Strategic Conclusion

The Indian M&E industry is expected to grow at much faster rate than global average rate. The coming years will witness digital technologies increase their influence across the M&E industry leading to a drastic change in consumer behavior and preferences across all segments.

Appendix

AGV – Animation, Gaming and VFX
AI – Artificial Intelligence
CAGR – Compound Annual Growth Rate
FDI – Foreign Direct Investment
GDP – Gross Domestic Product
ML – Machine Learning
M&E – Media and Entertainment
US – United States
VFX – Visual Effects